How Opting Out of the Workforce Can Hurt You During a Divorce

There was a fascinating opinion piece in the New York Times, entitled, "Do Millennial Men Want Stay-at-Home Wives?" It was written by Stephanie Coontz, the director of research at the Council on Contemporary Families. The answer, apparently, is yes -- at least among the Millennials surveyed.

The specific question asked was whether those surveyed agreed with the following statement: "It is much better for everyone involved if the man is the achiever outside the home and the woman takes care of the home and family."

In 1994, a group of young people were asked the same question, and only about 20 percent of men and women agreed. Yet in 2014, when asked the same question, almost half of the young men (48 percent) now think women should stay home and tend the family. (About a quarter of young women now agree, too -- up just slightly from 1994.)

According to Coontz, there are many reasons why so many more young men now believe it is better for everyone involved to have one male wage earner, and a female stay-at-home mom.

But from my perspective as a divorce lawyer and mediator, I can tell you that women OR men who plan to be stay-at-home parents should only go into this kind of arrangement understanding the economic risks they're taking.

Risks for Stay-At-Home Parents

While we all hope it won't happen, divorce is still widespread, and our alimony laws in Pennsylvania and New Jersey are less generous than they once were. Even more seriously -- stay-at-home parents who leave the workforce and try to re-enter in their forties or fifties face daunting challenges in terms of their earning power.

In a study of women who opted out of the workforce, “for every two years a woman is out of the labor force, her earnings fall by 10 percent, a penalty that lasts throughout her career," says Ruth Franklin, in an article from the New Republic. And that doesn't even address what a stay at home parent loses in terms of building a personal retirement fund or having other perks that come with long-term employment, such as major career advancements. All of these factors may create a greater need for alimony and supportive divorce financial settlements.

The point of this blog is not to condemn stay at home parents who make the choice to opt out of what is still a mostly hostile workplace for the primary caregiver of children. Until we have national policies that support work/family balance, it is incredibly difficult for both members of any couple to have hard charging careers and raise children. My wife and I opted to each take periods of time when we ran our own businesses from home, in order to achieve the flexibility we wanted until our kids were out of high school. We were lucky to have skills that allowed us to do that, I know.

Post-Nuptial Agreements for Stay at Home Parents

For a working parent who is considering being the primary, stay-at-home caregiver, consider a frank discussion with your spouse who will continue working outside the home.

You may be able to enter into a "post-nup" -- an agreement that can put in place protections to go beyond existing alimony and child support laws to protect the stay-at-home parent in case of divorce. The agreement could also stipulate that the "opting out" spouse will be entitled to more of the marital assets -- such as retirement funds, savings, investments, and real estate -- than New Jersey alimony laws would provide in case of divorce.

Though it may feel awkward to bring up an agreement like this, you, as the stay-at-home spouse, must explain that being a stay-at-home parent comes with financial risks for you -- even if it's something that you both want very much. All marriages face unexpected risks, and the risks for the parent who remains in the workforce are there, too. The parent who works outside the home, for example, risks a lack of meaningful relationships with his or her children. But if it's what you both want, you deserve financial security, as much as your spouse deserves time to be with the kids.